Forex Market Snapshot
WTI Crude Oil
Central banks, and in particular the Federal Reserve continue to shape global financial markets, with the recent sharp dovish shift of Fed Chair Jerome Powell getting another confirmation today. The minutes of the latest Fed meeting revealed that several members of the FOMC committee were in favor of leaving the benchmark interest rate unchanged.
That’s in sharp contrast with the official monetary statement released together with last month’s rate hike, and it added to this week’s bearish pressures on the US Dollar. The Euro, the Yen, the Swiss Franc, and gold all gained significant ground compared to the reserve currency, while the gains of some of the smaller risk-on currencies were less pronounced, despite the broad rally in risk assets across the globe.
US stocks extended their explosive oversold rally, but the rest of the world is far from being exuberant, and it’s unlikely that the global bearish shift will be reversed by a Fed policy shift, but the counter-trend move might still have ways to go. Tomorrow, several Fed members will speak yet again, including Jerome Powell, and we might get some specifics regarding the new, flexible strategy of the Federal Reserve.
EUR/USD, 4-Hour Chart Analysis
The break-out in the EUR/USD was arguably the most important move in forex markets today, as the most-traded pair moved past the crucial resistance zone near 1.15 thanks to the Fed’s dovish confirmation and the continued risk-on rally. The Euro hit its highest level since mid-October, and the pair could soon test the October swing high near 1.1625.